"While the false perception of the scope of the welfare state exists, we need to be pro-actively engaging with self-employed people to ensure they understand the risks they face if they are unable to work.”
Lower cost options for cover
Lower cost of cover is usually reflected in lower levels of benefits that would be paid out, but lower cost options do still have a place in helping to provide some level of cover.
In addition to cover provided by insurance companies, the self-employed can also benefit from some low-cost cover from the Association of Independent Professionals and the Self-Employed (IPSE) – a trade body for the sector.
The higher tier of membership of the association includes up to £5,000 of life cover, up to £2,000 illness or accident cover and up to £5,000 to cover absence due to jury duty in its annual fee of £297.
Lower cost alternatives to full IP are also becoming increasingly popular.
Mr Telfer says short-term IP can help the self-employed tackle the problem of cost when it comes to getting suitable cover.
He adds: “If affordability is a major barrier to self-employed people taking our income protection cover there are a number of options available to them and their adviser to enable them to tailor cover to meet their needs and budget.
“In the past, income protection policies were designed to pay benefits all the way through to the customers retirement age.
"Recent years have seen an increasing number of income protection insurers include options for benefits to be payable over a shorter period which enables cover to be arranged at a lower cost.
"Swiss Re Term & Health Watch, which was published in May 2017, showed that the majority of new policies were arranged on a short-term basis.”
Kevin Carr is chief executive of the Protection Review
